Urban consumers to pay 10p per unit more for power

Tariff for industries largely untouched, rural consumers will pay less

The recent good monsoons in Karnataka, which relies about 75 per cent on hydroelectric power, have cushioned the tariff hike for consumers in the state. Power consumers in select urban areas will have to pay 10 paise more per unit if the consumption exceeds 200 units.

Though this time the shock has been lessened, Karnataka citizens over the past five years have had to bear a cumulative tariff increase of 41.56 per cent.

Most of the other power tariffs have been left untouched or increased marginally and for some categories in village panchayat areas, the tariffs have been reduced. The new tariffs will come into effect from October 10, 2005. The rationalisation of power tariff is not expected to have a serious impact on industrial and commercial users.

The Karnataka Electricity Regulatory Commission (KERC) has also introduced separate tariffs for urban centres and rural areas in its order, which has been largely welcomed by the electricity supply companies.

Announcing this rationalisation of electricity tariff, K P Pandey, chairman, KERC said: "On account of good monsoons, on the direction by the commission, KPTC revised its power purchase estimates for 2005-06 and reduced the power purchase cost by Rs 736 crore in September 2005. The revenue gap after the reduction is at Rs 100 crore only." While the power purchase rate per unit has decreased by 4 per cent for FY'06, the average cost of supply decreased by 1.65 per cent.

With this rationalisation, KERC hoped that there will be no revenue gap and if there is any shortfall at the end of the year, the same could be met out of the subsidy allocation by the state government. The subsidy for FY'06 to the Escoms is at Rs 1,726.30 crore.

"The revenue impact of such rationalisation is not ascertainable for want of data in respect to the number of installations, sales and revenue across the state. However, since the tariffs have been marginally increased for a few categories in a few slabs in Bangalore and city corporation areas and the same has been reduced by an average of around Rs 10 per KVA in village panchayat areas, it is hoped that this rationalisation will fill the gap," Pandey noted.

He added that KERC has decided not to go in for uniform upward revision across the board and felt that as consumers in Bangalore and other cities enjoy comparatively a better quality of supply, they need to pay little more compared to the consumers in other areas.

"Accordingly, energy charges for consumption exceeding 200 units per month has been enhanced by 10 paise per unit for consumers in the Bangalore Metropolitan Area and in five other city corporations. Consequently, the existing scheme of rural rebate has been discontinued," Pandey added.

In respect of Bangalore metropolitan area, fixed charges for installations for less than 67 HP category has been retained at the existing level and in respect of 67 HP and above, the same has been increased by Rs 10 per HP per month.

In regard to high tension consumers (industries), while the existing tariffs have been retained in Bangalore, the demand charges have been reduced by Rs 10 per KVA per month for village panchayat areas.

On the crucial issue of transmission and distribution losses, KERC has allowed a total transmission and distribution (T&D) losses of up to 26 per cent as against a 28.36 per cent sought by the Escoms.

"KERC had allowed a 28 per cent T&D loss in the tariff order of 2003, while the Escoms could manage only 31 per cent and ever since they are trying to reduce. We hope this time around they will achieve the targets," Pandey said.

The highs and lows of tariff hike

Home consumers in Bangalore to pay 10 paise more per unit if consumption exceeds 200 units

Low tension users (more than 67 HP) in Bangalore metro area to shell out Rs 10 more per HP per month

Existing tariff for high tension industrial and commercial users in Bangalore have been retained

High tension users in residential apartments and colonies have to pay 10 paise more per unit